BCL Performance Marketing: Ethical Affiliate Marketing Australia: Affiliates Bidding on your Brand Name

The first two sets of customers are clearly ones that you want to reach. The equivalent in affiliate marketing is to have your links on websites used by your potential customers. That is what we provide at BCL.com.au, where we match the appropriate advertisements to the audience of our pages.

Another online equivalent is an affiliate who can come up with original search terms to catch potential customers who are searching for a product but don't know where to buy it. These affiliates use ppc (pay-per-click) to buy the traffic. This is called arbitrage where the affiliate's profit is the difference between the cost of the clicks they buy and the commission they can make.

Both these options require skill and effort. The third option - targeting potential customers who have already decided to walk into your shop - requires little skill or effort. This is the affiliate who bids on your brand-name.

Brand-bidding affiliates

All these affiliates do is to bid on the name of your shop. Your customer knows the name of your site and searches for it. Most likely you are top of the organic listings. The brand-bidding affiliate simply buys a listing to appear above or to the side of your free listing. To your customer, both links lead to your site.

The difference will be that, if the customer chooses the affiliate's link, you will pay that affiliate commission for a sale that they played no part in procuring. Their cookie will also overwrite the cookies of any affiliate who created the awareness of your site. You lose both ways - by paying out unearned commission and by reducing your conversion rates for more genuine affiliates.

How to Protect Yourself

Merchants can't leave this to networks, they need to do this themselves as different merchants will have different requirements.

1. State clearly in your terms and conditions what affiliates are not permitted to do. This gives you the right to cancel any sales that come through from affiliates through forbidden methods. Then send a broadcast email to all existing affiliates.
2. Police it. That can simply mean doing regular searches for your brand and seeing what comes up. (Sometimes the referring link will also give these sites away - but this is a less reliable method.) You can discover who the offending affiliates are by looking in the link for the affiliate code, or following the link, doing a test purchase and checking to see which network and affiliate claims the sale.
3. Tell offending affiliates that if they continue with these practices, you will remove them from your program. And follow through. Terms and conditions will make little difference if these affiliates think that they'll get away with it.
4. Some merchants cover themselves by bidding on their own name online. They tell me it's a lot cheaper than paying unnecessary commissions.